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  1. Three-cornered fight between Airtel-Idea, TRAI, Jio, COAI over predatory pricing; what has happened so far

Three-cornered fight between Airtel-Idea, TRAI, Jio, COAI over predatory pricing; what has happened so far

Over predatory pricing norms, it seems everyone is fighting with someone. Airtel and Idea have locked horns with TRAI; Jio and COAI are having a war of words; while telecom companies are already in a big competitive battle in the market. So what is happening in this three-cornered fight?

By: | Published: March 6, 2018 7:49 PM
Three-cornered fight between Airtel-Idea, TRAI, Jio, COAI over predatory pricing; what has happened so far

Over predatory pricing norms, it seems everyone is fighting with someone. Airtel and Idea have locked horns with TRAI; Jio and COAI are having a war of words; while telecom companies are already in a big competitive battle in the market. So what is happening in this three-cornered fight?

Last month, the Telecom Regulatory Authority of India (TRAI) announced predatory pricing norms under which the regulator will impose fines of up to Rs 50 crore per circle (service area) on operators if their service tariffs are found to be predatory in nature.

A tariff will be considered predatory if in a “relevant market” any telecom operator with over 30% market share offers its services at a price below the average variable cost in a bid to reduce or eliminate the competition. This norm has divided telcos, with Airtel, Idea, and Vodafone on one side and Reliance Jio on the other.

Sunil Mittal’s Bharti Airtel said that predatory pricing norm was “tailor-made to suit a single new operator while undermining the sanctity of regulatory decision-making process” without naming Reliance Jio. Vodafone, however, clearly said that TRAI’s latest norm is favouring Jio and should be legally challenged.

And it has been. Airtel and Idea moved Telecom Dispute Settlement and Appellate Tribunal (TDSAT) seeking a stay on the order. The telecom tribunal on Tuesday gave three weeks to TRAI to respond to allegations. Meanwhile, both TRAI and Jio have called the allegation baseless.

TRAI chief RS Sharma in an interview with ET Now said that it was telecom regulator’s mandate to create a level playing field for telecom companies. He said that any offer has to be transparent, non-discriminatory, and non-predatory.

Meanwhile, on February 20, Cellular Operators Association of India (COAI) said that the norms benefit a particular operator and has “deeply victimised” the industry, to which, Reliance Jio demanded a public apology and threatened to pursue defamation proceedings. To this, COAI hit back at Jio demanding a public apology while also threatening legal proceedings.

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